Taxpayers may need to foot new Olympics bill

TAXPAYERS may be asked again to bail out the £900 million Olympic Village within a few months, Games chiefs admitted today.

An extra £95 million pumped in to keep the building project on track will run out next spring and a further call on the Olympic contingency fund may be necessary, 2012 chiefs told MPs.

John Armitt, chairman of the Olympic Delivery Authority, said: "So far most of the unexpected events have been the funding of the Village and in order to get on the site the Government has released £95 million to take us through to spring when hopefully we will get our finance in place.

"If we haven't then we will require further contingency but overall I'm confident we will keep within the budget set."

Olympics minister Tessa Jowell admitted that no private money may be found for the Olympic village.

She said: "Of course, it's possible (that we won't raise any) private sector money, but that doesn't mean we will give up on the possibility of private sector investment or investment from another source other than government."

Talks to plug a gap in private sector funding for the village have involved three housing associations.

Meanwhile, Australian developer Lend Lease has until March to raise funds for the project.

Mr Armitt said the ODA stands to benefit from the worldwide economic downturn as he expects inflation to fall.Savings may be made on the price of steel, which has risen by 3,000 per cent in recent years.

Mr Armitt said: "(Construction) inflation has stayed fairly high in the last 12 months at seven per cent although there's been a slowdown in the last quarter. That will potentially benefit us."

He also raised the prospect of some of the thousands of firms supplying the Olympic project going out of business.He said: "There will be companies getting into financial difficulties and maybe going bust."